The Evolution of Targeted Advertising: From Traditional Methods to Programmatic Advertising

by | Mar 6, 2024

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You no longer have to rely only on traditional media to get your brand noticed. The drastic technological advancements in the past few decades have totally disrupted advertising.

In the old days, you had to pay a lot and hope that your message would reach the right audience through mass reach. But now, you can craft engaging ads that reach your intended crowd at the right platform and moment through programmatic advertising.

Read on to know more about it and how modern advertising can be your game-changer due to its rich ad formats, brand engagement potential, and targeting capabilities.

The Evolution of Advertising

In the pre-internet era, you could only advertise through newspapers, billboards, radio, flyers, and television. Traditional media’s extensive reach is one of its defining characteristics. Though this media is still widely used, it isn’t capable of targeted reach, unlike digital media.

You cannot track and measure the performance of your traditional campaign, which is a drawback. Though figures like sales trends, viewership, and survey forms exist, they only provide a decent idea about your ad’s performance and are not conclusive.

With digital marketing, you stand a decent chance of staying competitive, even if your business is small. Targeting the right audience with programmatic advertising saves you money and time since you focus on people with a high likelihood of converting.

What is Programmatic Advertising?

Programmatic advertising is a type of online targeted advertising that uses software to automate the buying of advertising spaces to deliver targeted ads. It utilizes machine learning and other algorithms to ensure your messages reach the intended users at the right platform and time.

The advertisements are delivered to the right audience by automation using various platforms through various platforms, eliminating the need for manual insertion orders. You can buy ad impressions based on user signals and cues. While programmatic advertising will be effective for your small business, you must support it with a solid digital marketing strategy.

How Does Programmatic Advertising Work?

Now that you have a basic idea of this type of advertising, you should also understand its mechanism to get a clearer picture.

Programmatic ads connect websites with ad inventory and companies looking to promote their products or services. You can better understand this process through some technical concepts:

⇒ Demand Side Platform (DSP):

Your advertising team buys advertising spaces from the websites having them and manages your campaigns through DSP. This process involves the usage of a demand management platform(DMP) to ensure your ads reach the target audience. It uses factors such as demographics, location, and online behavior for the same. Some examples of DSP are Facebook Ads Manager, Rocket Fuel, Choozle, and App Nexus.

⇒ Real-time bidding (RTB):

Advertisers bid for ad spaces through DSP using real-time bidding. Your advertising team can participate in an auction for an ad impression on the publisher’s site. If your ad wins the bid, it will immediately go live there.

⇒ Supply-side platform (SSP):

Website owners sell their ad spaces to you using the supply-side platform in a way that they benefit from the sale. Whenever someone from your target audience visits the owners’ website, the SSP receives an ad request. Commonly used SSPs are Xandr, Criteo, Magnite, and OpenX.

⇒ Ad exchange:

It is an online space where your advertising team and agency connect with publishers to buy ad impressions through RTB. This process will inform them of the prices and places your ads could appear.

To summarize,  DSP allows advertisers to participate in auctions and buy ad spaces from the website owners who offer them through SSP.

The Types Of Programmatic Advertising Channels

→ Display ads:

Display advertisements include various visual ad formats such as banners, text, videos, and images you see on many websites and apps. They prove very helpful for programmatic audience targeting. The below image shows a display ad on TechCrunch, a technology news outlet.

display-ad-on-techcrunch

Note: Read our post to learn how to create a Google display ad. 

→ Native ads:

These ads are displayed on relevant websites’ pages and apps in a way that blends with their content and appearance. This format is perceived positively by the readers and is also good for creative storytelling.

native-ad-sponsored-content

Source 

→ Video ads:

Video ads are an engaging way of conveying your brand’s message and offerings to form a lasting emotional connection with them. They appear on streaming platforms, social media, and many websites. These ads appear in the beginning or the middle of a video and can be skipped in a few seconds. Follow these guidelines to create a YouTube video ad.

The below image shows an ad at a video’s beginning.

youtube-video-ad

→ Interactive ads:

Interactive ads allow your audience to interact with your advertisement’s elements in a fun way. In the process, they get to know your values and offerings engagingly. For example, quizzes, interactive videos, 360-degree video ads, polls, etc.

The gif image below depicts a part of a 360-degree video advertisement. It allows you to view the video in any direction by rotating the camera. Just drag your cursor from one point to another in the video.

interactive-ad

Source.

→ Digital Out-of-Home (DOOH) Ads:

DOOH ads are dynamic content displayed on screens and billboards in public spaces. Advertisers use software to control what ads appear on the digital screen and make them relevant to the place, audience, weather, and more.

digital-out-of-home-advertising

Source.

The Precision Of Programmatic Advertising

Unlike traditional media like billboards, radio ads, and newspapers, which are a complete hit-or-miss due to their lack of targeted reach, programmatic audience targeting allows you to reach your audience precisely. The following features of programmatic advertising make its targeting  so effective:

» Data-based reach:

There are slim chances of going wrong when you target your audience based on their demographics, interests, devices used,  online activity, and location. Contrast this with traditional media, which relies on intuitive guesses and assumptions about the audience.

» Campaign analytics:

The key to successful programmatic advertising is knowing your campaign’s strong and weak areas. Using analytical data, you can optimize your campaign in real-time to reach your audience better. For example, if you notice that your ads are not receiving engagement from the mobile users segment, analyze how you can change that.

» Retargeting:

Retargeting allows you to reconnect with potential customers who previously interacted with your business but didn’t perform the desired action. For example, buying a product, downloading content, etc.  This process improves your brand’s recall value and puts it at the forefront of your customer’s mind, increasing the chances of conversion.

Programmatic Advertising and Google Display Ads

In the world of ads, programmatic advertising and Google Display Network(GDN) are among the most commonly used means. They have similarities and differences. But how will you decide which of them you should use? We will explain that here.

Similarities:

They both offer targeted reach on various factors(demographics, location, interests, etc.) and can automate the advertising processes. Google Ads and programmatic audience targeting allow you to engage your audience through various ad formats such as text, images, video, etc.

Differences:

Reach is where programmatic advertising has an edge as it doesn’t restrict itself to Google-owned properties and reaches many websites beyond that. Connecting with potential customers through GDN is cheaper as it offers multiple pricing options such as CPC(cost per click), CPM(cost per mile), and CPA( cost per action). Programmatic advertising typically uses ‘cost-per-mile impressions’, which is expensive.

What should you use?

It all depends on your budget and expertise in advertising. If you are new to digital marketing and have budget constraints, learning Google Ads best practices will suffice. Take advantage of programmatic advertising’s superior targeting capabilities if you have the experience and money for it.

Note: Learn the best Google Ads practices through our post.

Trends

Artificial intelligence(AI) and technologies like virtual and augmented reality are gaining prominence. Such technologies help you deliver personalized and evocative messages to customers. Meta platforms are already delivering AR and VR ads. As the usage of AI-powered search engines grows, the organic site traffic is predicted to drop by 25% by 2026.

AI will strengthen targeting, personalization, content creation, etc. Programmatic audience targeting is accelerating, sparking data privacy-related discussion as it allows companies to access users’ online activity. Tracking cookies will be discouraged, requiring brands to comply with stricter privacy laws.

Advertising will be increasingly used to engage audiences through rich formats, digital-out-of-home media(DOOH), and similar channels. Brands not keeping up with these emerging trends risk losing visibility to their competitors.

Conclusion

The world has come a long way from the traditional means of mass reach to precise programmatic advertising. To the credit of this change, you can now create more engaging and personalized advertisements to forge emotional connections with your audience.

If you face budget and experience constraints, you can start with Google and Meta Advertising and later switch to programmatic advertising after gaining experience. Automation and other technologies are constantly evolving, which is great. But it also requires you to up your game to stay relevant. You must take care of the data privacy issue, which has been one of the primary concerns about targeted advertising.

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